As of June 2003, there were 42 Portuguese Investment Funds Management Companies, 16 of them managing conventional Mutual Funds and 26 managing only Real Estate Funds.
These Companies managed a total of 221 Mutual Funds and 49 Real Estate Funds and the total assets under management accounted for 30,509 million USD, of which 24,246 million USD related to Mutual Funds and the remaining 6,263.3 related to Real Estate Funds.
These figures show an increase of the assets under management of 13.5% in 2003, and of 17.8% since June 2002. Mutual Funds grew 12.2% in 2003 while Real Estate Funds grew 19.1%. During the 12 months period ended in June 2003, Mutual Funds assets rose 13.9% and Real Estate Funds rose 36.0%.
This growth includes the effect of the decrease of the price of the dollar face to euro and, therefore do not reflect the true evolution of assets under management. In effect, considering the values in euro, mutual funds decreased their value by 0.6% between June 2002 and June 2003, while real estate funds grew 18.9%, and the Portuguese total investment fund industry rose 2.8%.
Money Market Funds and Bond Funds continue to dominate Portuguese Investment Funds Market with a share of 80.1% of Total Mutual Funds and 63.6% of Total Investment Funds, which compare to 73.8% and 60.7%, respectively, observed in June 2002.
Equity and Balanced Funds lost share, representing, in June 2003, 13.5% of Total Mutual Funds and 10.7% of Total Investment Funds, while, in June 2002, they represented 17.0% and 13.9%, respectively.
Real Estate Funds registered a sharp growth in assets under management (36.0%) and increased their market share to 20.5% of Total Investment Funds, comparing to 17.8% observed in June 2002.
At the end of June 2003, there were a total of 649 Funds and/or Sub-Funds domiciled abroad and registered for sales in Portugal, and the total retail sales of these Funds in Portugal accounted for 287.8 million USD, which represents a growth of 64.3% compared to June 2002. This growth is a consequence of a greater number and wideness of the Funds offered and of the easier access to them made possible by an enlargement of the institutions offering these products.
LEGAL AND REGULATORY DEVELOPMENTS: In the beginning of 2004, a new legal and regulatory framework for Mutual Funds will enter into force. This new framework is a consequence of the adoption of the UCITS Directives 2001/107/CE and 2001/108/CE and will wide the spectrum of investment possibilities for mutual funds and the spectrum of activities for mutual fund management companies. The corporate type of Investment Funds is now possible under this new law and mutual fund management companies are also allowed to manage individual portfolios, real estate funds and venture capital funds.
A new CMVM2 regulation is expected and it will create a new type of funds, called FEI - Especial Investment Funds. These Funds do not fall under the UCITS Directive and may invest in other types of assets, not necessarily financial ones.
Another CMVM regulation will be released in the short run to allow ETF - Exchange Traded Funds.
Table 1- Assets under Management by Portuguese Investment Funds.
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(Million USD) June 2002 September 2002 December 2002 March 2003 June 2003
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Bond Funds 7,443 7,410 7,694 8,270 9,193
Equity Funds 2,035 1,388 1,540 1,391 1,740
Money Market 8,281 8,373 9,362 9,768 10,219
Funds
Balanced Funds 1,578 1,419 1,459 1,425 1,524
Funds of funds 1,492 1,242 1,168 1,056 1,094.3
Guranteed Funds 468 364 389 440 476
Real Estate 4,606.7 4,672.6 5,259.0 5,775.3 6,263.3
Funds
Mutual Funds 21,296.6 20,196.7 21,612.0 22,349.2 24,246.4
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